Genting Files $1bn Lawsuit against Walt Disney and 21st Century Fox

Genting Malaysia Berhad, a giant in the casino industry, has filed a lawsuit against 21st Century Fox and Walt Disney.

The company has filed its complaint with the US federal court and it is expected to be seeking damages of more than $1bn.

Genting is alleging that the two entertainment companies did not honor a deal they made in 2013 for a Kuala Lumpur theme park, in which they allegedly committed to license some of their intellectual property, including from hit movies such as Planet of the Apes and Ice Age.

The details of the lawsuit

According to the suit, Fox is allegedly looking to terminate its contract. Disney is also said to want to get away from its obligations. The main reason is the proximity of the theme park to a casino, which would be detrimental to the family-friendly image that both companies try to portray.

Fox World was supposed to be the main centerpiece for Resorts World Genting, an integrated resort complex in the Genting Highlands. The resort is a mountain retreat more than 6,000 feet above sea level and about an hour by car from Kuala Lumpur. It receives more than 23 million visitors annually.

The project has been subject to numerous delays. The lawsuit claims that Fox is using these delays as their reason for canceling its part of the deal. Fox brought forward a notice of default, meaning the developer needed to open the park within 30 days, which is a deadline that cannot be met.

The suit claims: “This is a case about seller’s remorse, first by Fox, and then by Disney, after the latter began the process of acquiring Fox in a deal now expected to close in the first half of 2019.”

Potential damages

The lawsuit says Genting Malaysia Berhad has an entitlement that allows them to recoup more than $750m in investment that has already been made in the park. Genting is also seeking punitive and consequential damages worth more than $1bn.

Originally, the theme park was to open in 2016, but as a result of the delays, the new opening date has been pushed back to 2019.

The park replaces an old theme park that was on the site and is being built over 25 acres. There are set to be almost 30 different attractions and rides, many of which were based on blockbuster movies.

Disney’s distaste for gambling

This is not the only controversial gambling issue that Walt Disney has been embroiled in recently. It contributed significant funds in Florida in advance of the recent midterm elections.

Included on the public ballot was Amendment 3, which would see the public having the power to decide on gambling expansion, rather than the legislature if approved. Politicians have made a lot of calls to allow for more extensive gambling laws in the state.

However, the public, for the most part, is not in favor of this expansion. Thus Walt Disney, which is anti-gambling, wanted to ensure that this measure got approval. It donated more than $20m directly to groups pushing for a yes vote on Amendment 3.

The Seminole tribe has a major stake in Florida’s gambling sector, with an exclusive agreement with the state for certain casino games such as blackjack. The Seminole does not want this to change, so they also gave significant contributions to the yes movement.

Some of the notable parties against the amendment include two NFL teams – the Miami Dolphins and the Tampa Bay Buccaneers.

Amendment 3 needed at least 60% of the vote to be passed – it got about 70%. Therefore, the public in Florida will decide upon future expansion of gambling laws.

Disney, of course, has a major presence in the state and is happy with this outcome. It doesn’t want its image to be tainted by the state turning into a hotbed for gambling. It wants to continue to promote its family-friendly image, similar to the case involving Genting.